M.P.THAKKAR - (1.) TWO questions of an unprecedented nature relating to the interpretation of sec. 281 A of the Indian Income Tax Act 1961 as amended by the Taxation Laws (Amendment) Act 1972 which came into force on November 15 1972 have been raised in this revisional application by original defendants Nos. 1 and 2 whose contention that the suit instituted by respondent No. 1 original plaintiff Hemkunverben was not maintainable was negatived by the trial Court which heard the relevant issue being issue No. 12 as a preliminary issue. Aforesaid two questions are :- (1) Whether sec. 281A of the aforesaid Act as amended is retros- pective and applies to pending suits; (2) Whether it applies to suits as against newly added defendants who are impleaded subsequent to the enactment of aforesaid provision viz. sec. 281A which was incorporated with effect from November 15 1972
(2.) The basic facts are not in dispute. The suit giving rise to this revision application viz Special Suit No. 52/72 has been instituted by Hemkunverben on the premise that certain property (Fixed Deposit Receipts) standing in the joint names of Makuben the paternal grandfather of defendants Nos. 1 3 4 and 5 and Savitaben (defendant No. 1) really belonged to the plaintiff and that Makuben and Savitaben were her benamidars. A declaration to this effect was sought along with a consequential injunction. The suit was resisted by petitioners (original defendants Nos. 1 and 2) inter alia on the ground that the suit was not maintainable in view of the aforesaid provision viz. sec. 281A which in so far as material is in the following terms : 281 (1) No suit to enforce any right in respect of any property held benami. whether against the person in whose name the the property is held or against any other person shall be instituted in any court by or on behalf of a person (here after in this section referred to as the claimant) claiming to be the real owner of such property unless (a) the income if any from such property has been disclosed in any return of income furnished by the claimant under this Act or (b) such property has been disclosed in any return of net wealth furnished by the claimant under the Wealth-tax Act 1957 (27 of 1957); or (c) notice in the prescribed form and containing the prescribed particulars in respect of the property has been given by the claimant to the Income-tax Officer. (2) The Income-tax Officer shall on an application made by any person in the prescribed manner and on payment of the prescribed fees issue for the purposes of a suit referred to in sub-sec. (1) relevant extracts from the return furnished by such person under this Act or the Wealth tax Act 1957 (27 of 1957) or a certified copy of any notice given by such person under clause (c) of sub-sec. (1) within fourteen days from the date of receipt of the application therefor. That the suit is of the nature specified in sec. 281A is obvious and is not in dispute. The only question is whether the provision concerned is prospective in nature as contended by the plaintiff or retro active as cont- ended by the petitioners. The Trial Court has taken the view that the provision concerned is prospective and not retrospective. The suit as originally framed was instituted on March 13 1972 impleading petitioner No. 1 Savitaben alone as a party defendant. Sec. 281A came into force some eight months thereafter on November 15 1972 The suit would therefore be maintainable if sec. 281A is construed as prospective. It must however fail as being not maintainable if it is interpreted as having retrospective operation as contended by the petitioners. On a plain reading of sec. 281A it is evident that it can have only prospective effect and it cannot have retrospective operation so as to apply to pending suits instituted prior to the enactment of the said provision. In the first place sub-sec. (1) of sec. 281A has employed the expression shall be instituted which obviously has a reference to the initial institution of a suit. In the second place clause (c) of sub-sec. (1) of sec. 281A would become otiose and meaningless if the section were to be construed as having retrospective operation. A citizen can institute a suit of the nature contemplated by sec. 281A (1) (e) after giving a notice in the prescribed form to the Income-tax Officer. If sec. 281A is construed as having retrospective effect in order to institute a suit a citizen would be required to give a notice conforming to a provision which was unborn on the date of institution. A citizen cannot be expected to be gifted with provision and to be able to read the future by anticipating the provision that may be enacted by the Legislature in future. It therefore needs no argument to hold that the provision concerned is prospective in nature. There is no express provision giving retro-active effect and it cannot be said that by necessary implication the Legislature wanted to give retrospective effect to the said provision. In fact the Legislature could never have contemplated making it retrospective in operation having regard to the aforesaid aspect. The view taken by the trial Court on this point must therefore be confirmed.
(3.) The grievance of the learned counsel for the petitioners in regard to the view taken by the trial Court that the aforesaid provision (sec. 281A) will not apply even as against newly added defendants who are impleaded for the first time subsequent to the enactment of the said provision (it was enforced on November 15 1972 appears to be well founded. The suit was initially instituted against only one person namely petitioner No. 1 Savitaben The rest of the defendants namely petitioner No. 2 Tribhovandas and opponents Nos. 2(a) to 2(c) were impleaded later on pursuant to an order passed by the learned trial Judge on February 2 1975 i.e some 22 years after the enforcement of sec. 281A The learned trial Judge has taken the view that since the suit as agAinst original defendant No. 1 Savitaben had been instituted prior to the enforcement of sec. 281A and since the rest of the defendants were only formal parties there was no bar to the maintainability of the suit as against the newly added defendants who were impleaded for the first time after the enforcement of sec. 281A. The learned trial Judge has overlooked the provision contained in sub-rule 5 of Rule 10 of Order I of the Code of Civil Procedure of 1908 in reaching this conclusion. It is provided by the sub-rule that subject to the provisions of the Indian Limitation Act of 1875 sec. 22 a proceeding as against any person added as defendant shall be deemed to have begun only on the service of the summons. It is therefore evident that so far as the newly added defendants are concerned the suit can be treated 85 having been instituted only on the date on which the summons of the amended plaint was served i. e. some 2 years subsequent to the enforcement of sec. 281A. The suit as against them cannot therefore be considered as maintainable unless the case falls within clause (a) (b) or (c) of sec. 281A(1). It is not contended on behalf of the plaintiff that either of the aforesaid three clauses is attracted. Under the circumstances as the matter stands to day there is no escape from the conclusion that the suit as against the newly added defendants is not maintainable. The learned trial judge has committed an obvious error in proceeding an the assumption that the newly added defendants are formal parties. The namely added defendants the son and grandsons of Makuben in whose name along with the name of Savitaben the Fixed Deposit Receipts stand (defendant No. 2 is the son of Makuben and defendants No. 3 4 & 5 are the grandsons of Makuben). The declaration sought by the plaintiff would bind the newly added defendants as well. Under the circumstances it cannot be said that they are formal parties. The view taken by the learned trial Judge cannot therefore be sustained. It must be held that the suit as against defendants Nos. 2 to 5 is not maintainable as the matter stands today.;